All Richard Durkin wanted was a laptop with an inbuilt modem.
But what he ended up with was an epic 16-year legal tussle, a £250,000
bill for legal fees and, now, a date at the supreme court.
The
44-year-old married father of two has been engaged in a
David-and-Goliath battle against the bank that he says "annihilated" his
credit rating after he walked into his local PC World to buy a £1,500 laptop in 1998.
With the help of a supportive QC, a charity and a leading solicitors' body, he has now succeeded in winning a hearing at the supreme court,
which is reserved for cases "of the greatest public or constitutional
importance affecting the whole population". On 28 January a panel of
five justices will decide once and for all whether he was the victim of
an injustice following a dispute over a credit agreement.
He is
seeking a six-figure sum after arguing that being wrongly blacklisted
meant he was unable to buy a home; papers lodged with the court state
that Durkin alleges the bank's conduct "amounted to extortion". The
marathon legal row is seen as an important test case for thousands of
people who say their lives have been ruined after black marks were put
on their credit files.
"People don't realise how much damage a
default on your credit record does until they actually have one," he
said. "It's like I'm in a financial jail." He acknowledged that taking
his case to the supreme court was a high-stakes move: "If I lose, I go
bankrupt – simple as that."
The saga began on 28 December 1998,
when Durkin, an offshore construction surveyor, went to the Aberdeen
branch of PC World to buy a laptop. The sales assistant pointed out a
particular model, but it was in a sealed box, so it was not possible to
check whether it had the right modem.
It is claimed that the
assistant suggested Durkin buy the laptop, saying that if there was a
problem he could return it and get his £50 deposit back. Durkin bought
the computer, handed over his £50 and signed a credit agreement with HFC
Bank – which provided PC World's in-store finance and is part of the
HSBC group – for £1,449 to cover the balance. When he got home he found
the laptop did not have an inbuilt modem, so he took it back the next
morning. But the manager on duty refused to take the computer back,
refund his £50 or cancel the agreement.
Durkin left the laptop at
the shop, then went to work offshore, but when he got home a fortnight
later he found the laptop waiting for him. He again took it back to the
shop, where it stayed, and later sued PC World for the £50. The company
paid up without admitting liability. Durkin assumed that was the end of
the matter, but HFC Bank said he was still required to make payments
under the terms of the agreement. He says he explained what had
happened, but the bank warned that if he did not pay up, possible
consequences included "difficulty in the future in obtaining a mortgage
or other credit".
Sure enough, HFC Bank later put a default notice
on his Experian and Equifax credit files. Durkin says he tried without
success to get these black marks removed, and the bank "made no
inquiries into [Durkin's] claim that he had been entitled to and had in
fact rescinded his contract of sale", according to a 2010 court
judgment. The black marks stayed on his files until at least 2005.
This
had a major impact on his finances and, he claims, prevented him from
buying a family home in Spain in late 2003. He says that because of the
default notice, he was not able to raise enough money for a 30% deposit
on a €300,000 property in Malaga.
The case eventually made it to Aberdeen sheriff court where, in March 2008, Durkin won his case.
Sheriff James Tierney ruled that he had been entitled to reject the
laptop and cancel the sale and the credit agreement. The court awarded
damages of £116,000 to Durkin. But, two years later, that decision was overturned by judges at the court of session
in Edinburgh. They ruled that even though the sale of the laptop had
been cancelled, the contract of sale and the contract of loan were
separate agreements, and Durkin was not entitled to cancel his credit
agreement. That meant the information put on his file about him being in
default was factually accurate, they added.
The judges also
highlighted Durkin's spending levels at the time: they said that between
mid-2001 and late 2005, his credit card debt jumped from £4,000 to
£37,000. "It appears to have been the general level of [Durkin's]
expenditure, linked to his decision not to become a Spanish tax
resident, in which event a 95% mortgage would have been available to him
... that led to his being unable to afford to proceed with the purchase
of a property in Spain," they said.
For its part, PC World has
previously argued that Durkin bought the laptop in the knowledge that it
did not have an internal modem, while HFC Bank's case is that he "made
no call on them to amend the entries" on his files, and that the injury
and damage he claimed to have suffered was "too remote a consequence of
the alleged negligence", according to the 2008 ruling.
While some people might have thrown in the towel at that point, Durkin decided to plough on. The charity LawWorks
– which provides free legal help to those who cannot afford to pay for
it – put him in touch with a leading Scottish QC, Andrew Smith, who
agreed to act for him on a pro bono basis and will now represent him at the supreme court. Meanwhile, the Law Society of Scotland helped with funding the court costs.
"The
stress hasn't killed me yet," Durkin replied when asked how, and why,
he had battled away at this for so many years. "It's too late to throw
in the towel – I'd be bankrupt for doing the right thing." He added that
if he did not win justice, banks would continue "destroying lives
unhindered".
HSBC and Dixons Retail, which owns PC World, both declined to comment
Ref: here